Atlanta apartment flipper faces two foreclosures after market turn
A buy-and-flip apartment investor acquired a pair of Atlanta area
complexes less than two years ago, riding an unprecedented wave of
rent hikes caused by the COVID-19 pandemic.
But the Cobb County company could face losses due to rising interest
rates to cushion inflation. The complexes -- one in Sandy Springs and
the other near the Atlanta Beltline -- at the Fulton County Courthouse
are advertised for foreclosure sale Tuesday by their lenders.
Signs of a real estate crisis across the country and in Atlanta have
focused largely on the beleaguered office market as companies cut
space and landlords face lower rental income, falling property values.
and banks are less inclined to lend. The crisis has become less
pronounced among apartment owners. But some investors who paid large
sums for the complex using short-term loans with floating interest
rates are feeling the pinch of the Federal Reserve's
inflation-fighting campaign.
Experts say it's a warning sign of trouble to come, especially for
some aggressive investors who thought converting an apartment complex
would be easy money.
"There are people who came late to the game and were just trying to
flip an object," said Ladson Haddow, managing partner at Haddow &
Company, an Atlanta-based real estate consulting firm. "It worked
until it didn't."
...
...
While many major office buildings and hotels in Atlanta have recently
gone through foreclosures, apartment complexes have yet to come under widespread pressure. Occupancy rates and rents remain high, although
they have retreated from historic increases in 2021.
While rapid increases in interest rates can quickly stretch the
budgets of aggressive owners, those with longer-term strategies and
deeper pockets are more likely to endure, said distressed real estate
expert Henry Lorber & Associates.
"If you're just barely keeping your head above water ... at some point
your head is going to sink under water," Lorber said. "You can't raise
rent fast enough to double your mortgage payment."
https://biz.crast.net/atlanta-apartment-flipper-faces-two-foreclosures-after-market-turn/
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